Copper fell for a third consecutive session on Thursday, dropping to its lowest level in 10 days as hotter-than-expected US inflation revived speculation of another Federal Reserve rate hike. A sell-off in Asian chip stocks spread into the metals complex, while a labour agreement at BHP's Escondida mine removed the most immediate supply risk, according to Mining.com. Comex copper for December delivery fell 1.2% to $6.5810 a pound (about $14,508 a tonne) by late morning in New York, after trading as low as $6.5245 earlier in the session.
The most-active contract is now 4.5% below the record settlement of $6.89 set on September 9 and is heading for its longest losing streak since June. In London, three-month copper eased 0.9% to $14,360 a tonne in official trading after touching $14,289, the weakest level since October 5. Cash copper settled at $14,751 on Wednesday, $116 above the three-month price.
LME inventories have fallen to 228,000 tonnes, down 8% since the start of the month. On the Shanghai Futures Exchange, the most-traded contract lost 1.9% to 108,940 yuan ($16,276) a tonne. US consumer prices accelerated in September at the fastest pace in five months, data released on Wednesday showed.
This put a rate hike later this month back on the table and lifted the Bloomberg Dollar Index to its highest level since May 2025. Higher rates weigh on metals in two ways, by cooling demand and raising the cost of carrying inventory. South Korea's Kospi fell almost 8% on Thursday and entered a bear market as investors questioned how long the artificial intelligence spending boom can last.
Ole Hansen, head of commodity strategy at Saxo Bank, told Reuters, as cited by Mining.com: “Two things are happening at the same time: the easing worries of supply and the strong inflation report. That was too much for the market to chew in one go and some profit-taking is emerging.” Hansen also said the technical picture is deteriorating, with copper challenging an uptrend that began in March and edging below its 50-day moving average. Kyle Rodda, senior financial market analyst at Capital.com, told Reuters: “For copper, it's a double whammy of the AI trade coming under pressure from the sell-off in chip stocks, and the impact of rising Fed rate hike odds.” Sucden Financial, in a note, said it expects the firm dollar and renewed rate pressure to keep the complex defensive, with copper's remaining supply risks offering only very limited support.
Supply risks shrank on Wednesday afternoon, when supervisors at BHP's Escondida in Chile ratified an agreement their union had struck with the company hours earlier, removing the threat of a stoppage at the world's largest copper mine. Unionised workers at Antofagasta's Centinela remain on strike, and the open pit at Codelco's El Teniente is still shut following last week's landslide. GEM Mining Consulting had rated 5% of Chilean output at risk a week ago, a figure that has narrowed considerably, according to Mining.com.
Antofagasta reported a 7% rise in third-quarter copper production and held its 2026 guidance of 625,000 to 655,000 tonnes despite the Centinela strike. Its 2027 outlook, however, spooked investors. The company now expects 630,000 to 690,000 tonnes in 2027, below its original 650,000 to 700,000 tonnes and short of BMO Capital Markets' estimate of 703,000 tonnes.
It also raised its cash cost guidance on higher diesel prices. RBC analysts wrote that the outlook “implies no growth on the original guidance for 2026.” The sell-off has also drained most of the remaining tariff premium from the Comex curve. The December Comex contract settled on Wednesday just $49 a tonne above the LME three-month official price, down from a gap of about $175 on Tuesday.
Based on Macquarie's calculations, the market-implied odds of a 15% US import duty taking effect on schedule in January are roughly 2%, compared with the 10% the bank read into the spread at the end of September. Macquarie has described the outcome as “very binary,” noting that a decision against a tariff would see the Comex price “collapse, taking the LME price with it.” The bank counts a 223,000-tonne surplus this year and surpluses above 700,000 tonnes a year from 2027. The International Copper Study Group broadly shares this view, forecasting a 368,000-tonne surplus next year.
BMO, by contrast, argues that the near-2 million tonnes held in the United States represents China's strategic reserve relocated rather than surplus, and forecasts copper averaging $14,675 next year. Copper producers fell with the metal on Thursday. Freeport-McMoRan dropped 2.4% to a market value of $98 billion and Southern Copper fell 2.4% to $165 billion.
BHP was down 1.4% at $213 billion, Rio Tinto 1.3% lower and First Quantum 1.7% lower. Lundin Mining lost 1.0% and Ivanhoe Mines 1.5%. Teck Resources, up 0.5%, was the only major copper producer in positive territory.
Freeport has shed 5.5% over the past week. Antofagasta was the day's biggest casualty, falling 6.4% to £33.40 in London, for a market value of close to £33 billion, and its loss over the past week reached 10%. The stock is now flat for 2026, as is First Quantum, while Southern Copper is up 41%, Glencore 37%, BHP and Teck 36% each, and Freeport 34%.
Polish state miner KGHM rose 2.4%, bucking the trend after the European Union placed its $2.4 billion of copper projects on a fast track last week. Comex copper is up about 17% in 2026.
Source: mining.com